The parties cannot take actions which in whole or in part, in fact or in law, contribute to the change of control of the target undertaking. Pursuant to the standstill obligation, the undertakings must therefore remain independent and autonomous entities until the NCA has cleared the transaction. The obligation applies to all notifiable transactions and enters into force automatically. The NCA can grant exemptions from the standstill obligation, but the threshold is very high.
Even though the standstill obligation places restrictions on what the parties can do, it does not prohibit every action. In other words, the standstill obligation distinguishes between permitted actions and prohibited actions which contribute to the change of control.
In addition, the parties are subject to a prohibition against anti-competitive cooperation until closing.
Practical tips
The parties should maintain business as usual until the transaction is cleared and completed.
Further, the parties shall not exchange commercially sensitive information, nor shall they cooperate with or be instructed by other parties in the transaction.
However, the prohibition does not prevent legitimate integration planning.
In order to reduce the risk of exchanging commercially sensitive information, a meeting agenda should be set prior to any meetings between the parties and minutes should be written.